Update: System Builder B3's Whereabouts Unknown After Reported Loan Default

That's what Marquette County officials in Michigan and a host of VARs are wondering after the system builder's Web site went down and its phones were disconnected.

B3 appears to be behind or in default of various county loans totaling more than $500,000, according to a report in The Mining Journal, a Michigan-area newspaper. One county commissioner said in the report that B3's building has been abandoned.

That has left customers and lenders alike puzzled over what has happened.

"We have been trying to figure that out for quite some time," said Chris Chaltron, senior technician at Creative Computer Solutions of Michigan, a Troy, Mich.-based VAR.

Creative Computer Solutions was a B3 customer for several years before it began to find that components needed for custom-built PCs were out of stock and orders placed for customers were delivered in three to five days, instead of the promised two days. About a year ago, the VAR switched to another system builder, Chaltron said.

Chaltron, who said he recently read about B3's troubles in a local newspaper, is concerned because there are still many B3 systems at Creative Computer Solutions' customer sites. "There are two- to three-year warranties on these systems, and we will need to support them if something goes wrong," he said.

CRN tried to reach B3 and its president, Fred Schlaffer, at its corporate headquarters, but the telephones weren't working. B3's Web site, www.b3.com, also appears to be out of commission. The Marquette County Commission couldn't be reached for comment.

Marquette County Commissioner Bob Struck told CRN he had spoken with B3 executives last winter and they indicated that they were not selling as many systems as they would have liked due to poor economic conditions. He said he had not heard about B3 again until news reports began circulating last week about its apparent closer. He confirmed that B3's building has been abandoned and its phones are not working.

Chaltron said the VAR had first purchased from B3 when it was doing business in California.

B3 moved to Michigan in 2004. The system builder had teamed up with Sun Microsystems to develop the SBox, a system with Solaris for x86 computers.

B3 was listed at No. 20 in CRN's 50 Leading System Builders report this year. The Gwinn, Mich.-based company reported that it earned $8.2 million in revenue in 2005 and employed 26 people.

B3 also was recognized by CRN in its 2004 and 2005 fast-growth system builder reports. In those reports, Schlaffer said B3 served about 1,400 VARs, including many ASCII Group members.

This story was updated on July 11 with information from Marquette County Commissioner Bob Struck.